State and local pension funds already display plenty of transparency
Comptroller Susan Combs released a report last week urging greater transparency for state and local pensions, recommending that they “report on a public website such line items as their actual investment returns for the past 10 years and the plans’ assumed rates of return.”
As the representative of more than 80 local pensions around the state, our reaction was, “Fair enough; it’s hard to argue with transparency. We can do that.”
The trouble is that, the more we thought about it, all local pensions across the state already operate in the fashion Combs suggests. They are public entities, and they operate as such, with the information Combs requests being readily available. Let’s review the status quo.
First, each local pension submits quarterly reports to the Texas Pension Review Board, including such information as beginning and ending quarterly market values, numbers of active members and retirees, numbers of new and total beneficiaries, the total of quarterly contributions by employees and employers, the quarterly benefits paid out, and any plan changes made during the quarter. All of this information is available to members of the public through the review board. It uses this and other information provided by local pensions to create snapshots of accrued liabilities, values of assets, funded ratios, amortization periods and all other sorts of information, such as boards of directors and detailed system information.
Second, all local pension board meetings are posted per the Open Meetings Act requirements, and taxpayers are welcome to attend. Taxpayers may request to see and get copies of local fund records, except for the private records of individual members and retirees, information that is protected under the Texas Public Information Act.
We’ve never heard of a single situation where pension fund trustees and staff have refused to answer or address the questions and concerns of a single taxpayer, if they ask. In fact, at the last House Pensions, Investments & Financial Services Committee hearing in September, a number of taxpayers made it clear that they had been in contact with pension boards and had gathered a great deal of information that they were concerned about and bringing to the attention of the committee.
Which brings us to a third point: Beyond the above noted access to their local pension systems, taxpayers are free to attend Pension Review Board meetings and Senate and House committee meetings dealing with pensions. Taxpayers may talk to review board members and staffers and/or their elected officials to get information. Taxpayers’ local elected officials are required by law to review key plan documents every five years. And the review board already posts great quantities of information on its website.
The Texas Association of Public Employee Retirement Systems urges all of its members to provide complete and proactive transparency of their systems’ operations to their media; local, state and elected officials; and taxpayers. In our view, there’s nothing to hide, and most funds’ performance is routinely solid, enabling cities to keep municipal, fire and police salaries low, but competitive, in exchange for future retirement benefits. A study of Texas pensions found that 60 percent of those benefits come from investment performance, with the remainder from the city and employee contributions. That’s a pretty good deal for taxpayers, especially considering that more than 50 percent of Texas public employees don’t receive any Social Security benefits.
At her press conference, Combs singled out the San Antonio Fire and Police Pension Fund website, and indeed that website sets a good precedent for other systems. It’s important to observe that website development and maintenance creates additional costs for local systems, and they only provide information that is already available to taxpayers through the Pension Review Board.
We at TEXPERS compliment the comptroller on her wideranging efforts to make sure all aspects of local governance are transparent and available to taxpayers. But we would reject any implication that this has not been the case for local pensions. Combs might be creating more work for web developers and more costs for taxpayers by calling for the information to be more atyour-fingers, but that should not be understood to be a change from what is already occurring through the Pension Review Board or the pension itself.